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Jazz Pharmaceuticals receives EU Marketing Authorization for Sunosi

Jazz Pharmaceuticals (JAZZ) announced that the European Commission approved Sunosi to improve wakefulness and reduce excessive daytime sleepiness in adults with narcolepsy or obstructive sleep apnea whose EDS has not been satisfactorily treated by primary OSA therapy, such as continuous positive airway pressure.

Jazz should be in play, Stockwinners

Sunosi is the first dual-acting dopamine and norepinephrine reuptake inhibitor approved to treat EDS in adults living with narcolepsy or OSA and the only licensed therapy in the European Union for the treatment of EDS in adults living with OSA.

Once-daily Sunosi is approved with doses of 75 mg and 150 mg for people with narcolepsy and doses of 37.5 mg, 75 mg and 150 mg for patients with OSA.

Sunosi is approved in Europe, Stockwinners

At Week 12 of the Phase 3 clinical trial, 150 mg of solriamfetol for narcolepsy patients and both 75 mg and 150 mg doses for OSA patients demonstrated improvements in wakefulness compared to placebo as assessed via the maintenance of wakefulness test from approximately one hour post-dose through approximately nine hours post-dose.

The European Commission approval extends to all European Union Member States, as well as Iceland, Norway and Liechtenstein.

The Marketing Authorization Application for Sunosi is based on data from four randomized placebo-controlled studies included in the Treatment of Obstructive sleep apnea and Narcolepsy Excessive Sleepiness clinical trial program.

Data from the studies in the TONES program demonstrated the superiority of solriamfetol relative to placebo.

The Marketing Authorisation Application (MAA) for Sunosi is based on data from four randomised placebo-controlled studies included in the Treatment of Obstructive sleep apnea and Narcolepsy Excessive Sleepiness (TONES) clinical trial program. Data from the studies in the TONES program demonstrated the superiority of solriamfetol relative to placebo.

JAZZ closed at $151.05.

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Government forecasts steady energy prices in 2020 and 21

EIA says U.S. crude oil production will average 13.3M b/d in 2020

According to the U.S. Energy Information Administration’s (EIA) forecasts Brent crude oil spot prices will average $65 per barrel in 2020 and $68/b in 2021, compared with an average of $64/b in 2019.

Domestic productions to rise in 2020, Stockwinners

EIA expects West Texas Intermediate, WTI, crude oil prices will average about $5.50/b lower than Brent prices through 2020 and 2021, compared with an average WTI discount of about $7.35/b in 2019.

Global liquid fuels inventories were mostly unchanged in 2019, and EIA expects they will grow by 0.3 million b/d in 2020 and then decline by 0.2 million b/d in 2021.

The international offshore rig count for April 2018 was 194. Stockwinners
Production in all regions to rise in 2020, Stockwinners

EIA estimates that U.S. crude oil production averaged 12.2 million b/d in 2019, up 1.3 million b/d from 2018.

EIA forecasts U.S. crude oil production will average 13.3 million b/d in 2020 and 13.7 million b/d in 2021.

  • On January 1, 2020, the International Maritime Organization (IMO) enacted Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), which lowers the maximum sulfur content of marine fuel oil used in ocean-going vessels from 3.5% of weight to 0.5%.
  • EIA expects this regulation will encourage global refiners to increase refinery runs and maximize upgrading of high-sulfur heavy fuel oil into low-sulfur distillate fuel to create compliant bunker fuels.
  • EIA forecasts that U.S. refinery runs will rise by 3% from 2019 to a record level of 17.5 million b/d in 2020, resulting in refinery utilization rates that average 93% in 2020.
  • EIA expects one of the most significant effects of the regulation will be on diesel wholesale margins, which will rise from an average of 43 cents per gallon (gal) in 2019 to a forecast peak of 53 cents/gal in March 2020 and an annual average of 50 cents/gal in 2020. EIA expects diesel margins to decline to 49 cents/gal in 2021.
  • U.S. regular gasoline retail prices averaged $2.60/gal in 2019, and EIA forecasts that they will average $2.63/gal in both 2020 and 2021.
Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count
Production to continue at record high, Stockwinners

Most of the production growth in the forecast occurs in the Permian region of Texas and New Mexico.

Publicly traded companies in the space include BP (BP), Chevron (CVX), ConocoPhillips (COP), Exxon Mobil (XOM), Royal Dutch Shell (RDS.A) and Total (TOT). 

Ocean Rig sold for $2.7B, Stockwinners
Consolidations should continue in the industry, Stockwinners


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Anixter sold for $4.5 billion

Wesco to acquire Anixter in cash, stock deal valued at $4.5B

WESCO (WCC) and Anixter (AXE) announced that their boards of directors have unanimously approved a definitive merger agreement under which WESCO will acquire Anixter in a transaction valued at approximately $4.5 billion.

Anixter’s prior agreement to be acquired by Clayton, Dubilier & Rice, has been terminated, following CD&R’s waiver of its matching rights under the agreement.

Under the terms of the agreement, each share of Anixter common stock will be converted into the right to receive $70.00 in cash, 0.2397 shares of WESCO common stock and preferred stock consideration valued at $15.89, based on the value of its liquidation preference.

Based on the closing price of WESCO’s common stock on January 10 and the liquidation preference of the WESCO preferred stock consideration, the total consideration represents approximately $100 per Anixter share, giving effect to the downside protection described below.

Based on transaction structure and the number of shares of WESCO and Anixter common stock currently outstanding, it is anticipated that WESCO stockholders will own 84%, and Anixter stockholders 16%, of the combined company.

The combined company will have pro forma 2019 revenues of approximately $17 billion.

With an extensive global reach and increased international exposure, approximately 12% of revenues will be generated outside of North America.

Anixter sold to Wesco, Stockwinners

The increased scale will enable the combined company to accelerate digitization strategies and provide a platform for growth in attractive emerging markets.

WESCO expects to realize annualized run-rate cost synergies of over $200 million by the end of year three through efficiencies in corporate and regional overhead, including duplicative public company costs, branch and distribution center optimization, and productivity in procurement, field operations, and supply chain. In addition, WESCO expects incremental sales growth opportunities to result by cross-selling the companies’ complementary product and services offerings to an expanded customer base and capitalizing on the enhanced capabilities across both networks.

The combination is expected to be accretive to WESCO’s earnings in the first full year of ownership and, with the realization of synergies, substantially accretive thereafter.

WESCO also expects the transaction to generate significant margin expansion and EPS growth.

The combined company will have strong free cash flow generation, supporting continued investments in the business and enabling a return of capital to stockholders in the future.

Wesco to buy Anixter, Stockwinners

At closing, WESCO estimates that its pro forma leverage on a net debt to EBITDA basis will be approximately 4.5x.

WESCO intends to utilize the strength of the combined company’s cash flows, including significant synergies, to reduce its leverage quickly and ultimately intends to be within its long-term target leverage range of 2.0x to 3.5x within 24 months post-close.

Under the terms of the agreement, each share of Anixter common stock will be converted into the right to receive $70.00 in cash, 0.2397 shares of WESCO common stock, and preferred stock consideration consisting of 0.6356 depositary shares, each whole share representing a fractional interest in a newly created series of WESCO perpetual preferred stock.

The common stock consideration is subject to downside protection, such that if the average market value of WESCO common stock prior to closing is between $47.10 per share and $58.88 per share, then the cash consideration paid at closing will be increased commensurately by up to $2.82 per share, such that the reduction in value of the WESCO common stock is offset by an increase in the cash consideration within that range. $2.82 per share will also be paid if the value of WESCO stock is below $47.10.

The preferred stock consideration consists of 0.6356 depositary shares, with each whole depositary share representing a 1/1,000th interest in a share of WESCO Series A cumulative perpetual preferred stock, with a liquidation preference of $25,000 per preferred share and a fixed dividend rate calculated based on a spread of 325 basis points over the prevailing unsecured notes to be issued to effect the transaction.

The fixed dividend rate will be subject to reset and the Series A preferred stock will have a five year non-call feature.

WESCO has agreed to list the depositary shares representing the newly created series of preferred stock on the NYSE, and the security is expected to receive equity treatment from the rating agencies.

The 0.6356 depositary share to be issued in the merger per share of Anixter common stock is valued at $15.89 based on the liquidation preference of the underlying interest in the Series A preferred stock represented thereby.

Under the terms of the merger agreement, WESCO may elect to substitute additional cash consideration to reduce the amount of the preferred stock consideration on a dollar-for-dollar basis based on the value of the liquidation preference of the preferred stock consideration. WESCO and Anixter currently anticipate completing the transaction during the second or third quarter of 2020.

WESCO International, Inc. distributes electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturers products and construction materials in North America and internationally. 

Anixter International Inc. distributes enterprise cabling and security solutions, electrical and electronic wire and cable solutions, and utility power solutions worldwide. 

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Argenx issues positive guidance, shares rise

Argenx says beginning 2020 in an ‘exciting position’

In a regulatory filing, Argenx (ARGX) provided strategic outlook for 2020 outlining key priorities for its broad pipeline and path towards achieving its ‘argenx 2021’ integrated commercial vision.

Argenx issues positive guidance, Stockwinners

“We begin 2020 in an exciting position, having met all our objectives for our clinical programs.

This includes the completion of enrollment of our Phase 3 ADAPT trial of efgartigimod in gMG, the launch of key efgartigimod clinical trials in ITP and CIDP, and the initiation of cusatuzumab clinical trials in two AML settings with Janssen.

In addition, we’re announcing today positive proof-of-concept data for efgartigimod in PV, our third ‘beachhead’ indication, further demonstrating our initial development strategy of targeting pathogenic autoantibodies and creating commercial opportunities in several therapeutic areas.

Looking forward to the remainder of 2020, we plan up to five registrational efgartigimod trials and further expansion of the cusatuzumab global development plan with Janssen,” said Tim Van Hauwermeiren, Chief Executive Officer of argenx.

“Most importantly, we are continuing to execute on the ‘argenx 2021’ vision to become a global, integrated immunology company with our first launch of efgartigimod in gMG expected in 2021.

At the core of this growth strategy is a commitment to expanding our early-stage pipeline with immunology breakthroughs and advancing our late-stage candidates while extending our reach to bring first-in-class medicines to patients,” continued Van Hauwermeiren.

As part of its 2021 vision, Argenx highlights: leadership in FcRn and its therapeutics immunology potential; launch of MyRealWorld MG; and a “strong” financial foundation. In addition, Argenx reported “positive” proof-of-concept data in PV, the third beachhead indication as part of the broad efgartigimod development strategy.

Argenx has a close relationship with Janssen, Stockwinners

Within its neuromuscular franchise, Argenx is evaluating efgartigimod in gMG and efgartigmod in CIDP; within its hematology/oncology franchise, it is evaluating efgartigimdo in ITP and cusatuzumab in collaboration with Janssen (JNJ).

ARGX shares are up 5.2% to $165.00 in Thursday’s trading.

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RBC Capital’s predictions for 2020

Accelerating Netflix subs, Uber profitability among RBC’s top 10 surprise list

RBC Capital analyst Mark Mahaney compiled a broader research note titled “Top Ten Internet Surprises for 2020” list, in which he assigns a “reasonable chance” of 30% or more for the following to occur against the “average internet investor” expectations of the event being improbable.

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more
RBC expects subs accelerating in 2020, Stockwinners
  • 1) Netflix (NFLX) subscriber additions may accelerate because the company will be comping 2019’s “material price increase and a dramatic slowdown in marketing spending.
  • 2) Google’s (GOOGL) operating margins may be flat to up as its Google Cloud becomes a smaller margin drag and the company’s Other Bets division gets greater investment after the resignation of its founders.
  • 3) Uber (UBER) and Lyft (LYFT) achieve EBITDA profitability thanks “insurance expense leverage, driver and rider subsidies rationalization, pricing actions, and growth leverage”.
  • 4) Amazon’s (AMZN) profitability plummets as the company continues its “aggressive investment” in shipping and fulfillment, particularly internationally, while continuing the build-out of AWS salesforce.
  • 5) Maturing growth rates and large cash piles may see Google, Facebook (FB), and Booking.com (BKNG) become dividend payers in the internet sector.
  • 6) Spotify (SPOT) gross margins may expand as the company concludes its music label negotiations.
 EU ruling against Google seen as win for Amazon, Apple, Stockwinners
Google may pay a dividend, Stockwinners

RBC Capital Markets is a global investment bank providing services in banking, finance and capital markets to corporations, institutional investors, asset managers and governments globally. Locations span 70 offices in 15 countries across North America, the UK, Europe and the Asia-Pacific region. 

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Axsome Therapeutics reports positive migraine data

Axsome Therapeutics announces AXS-07 met primary, secondary endpoints

Axsome Therapeutics (AXSM) announced that AXS-07, Axsome’s novel, oral, multi-mechanistic investigational medicine for the acute treatment of migraine, met the two regulatory co-primary endpoints and significantly improved migraine pain and most bothersome symptoms as compared to placebo in the MOMENTUM Phase 3 trial.

Axsome reports positive migraine data, Stockwinners

AXS-07 also met the key secondary endpoint, demonstrating statistically significant superiority to the active comparator rizatriptan on sustained freedom from migraine pain.

MOMENTUM was a randomized, double-blind, placebo- and active-controlled trial which enrolled only patients with a history of inadequate response to prior acute migraine treatments, assessed using the Migraine Treatment Optimization Questionnaire, or mTOQ-4.

A total of 1,594 patients were randomized in a 2:2:2:1 ratio to AXS-07, rizatriptan, MoSEIC, meloxicam, or placebo, to treat a single migraine attack of moderate or severe intensity.

In addition to a history of inadequate response, enrolled patients exhibited a high rate of characteristics that are strongly associated with poor treatment outcomes including cutaneous allodynia, severe migraine pain intensity, obesity and morning migraine.

The study was conducted pursuant to a FDA special protocol assessment, or SPA.

AXS-07 met the two regulatory co-primary endpoints by demonstrating, with high statistical significance, a greater percentage of patients as compared to placebo achieving pain freedom and absence of most bothersome symptom two hours after dosing.

Superiority of AXS-07 to rizatriptan and MoSEIC meloxicam was established as specified in the SPA, by demonstration of a greater percentage of AXS-07 patients achieving sustained pain freedom from two to 24 hours after dosing, compared to rizatriptan and MoSEIC meloxicam, as well as to placebo.

The positive results on both co-primary endpoints along with the demonstration of component contribution support the filing of an NDA for AXS-07 in the acute treatment of migraine.

AXS-07 provided greater and more sustained migraine pain relief compared to placebo and rizatriptan, which translated to a significant reduction in rescue medication use for AXS-07 compared to placebo and rizatriptan.

The percentage of patients experiencing sustained pain relief from two to 24 hours after dosing was 53.3% for AXS-07, compared to 33.5% for placebo and 43.9% for rizatriptan.

Sustained pain relief from two to 48 hours was also experienced by a statistically significantly greater proportion of AXS-07 patients, compared to placebo and rizatriptan patients.

Rescue medication was used by 23.0% of AXS-07 patients, compared to 43.5% of placebo and 34.7% of rizatriptan patients. AXS-07 provided rapid relief of migraine pain with the percentage of patients achieving pain relief with AXS-07 being numerically greater than with rizatriptan at every time point measured starting at 15 minutes, and statistically significantly greater than with rizatriptan by 60 minutes.

The proportions of patients experiencing pain relief 1.5 hours after dosing were 60.5% for AXS-07 compared to 52.5% for rizatriptan and 48.3% for placebo.

AXS-07 was statistically significantly superior to rizatriptan on several other secondary endpoints including Patient Global Impression of Change and return to normal functioning at 24 hours.

AXS-07 was safe and well tolerated in the trial.

The most commonly reported adverse events with AXS-07 were nausea, dizziness and somnolence, none of which occurred at a rate greater than placebo or greater than 3%.

There was one serious adverse event in the AXS-07 arm which was deemed by the investigator not to be related to study drug.

The MOMENTUM study was conducted pursuant to an SPA with the FDA.

The SPA provides agreement that the overall MOMENTUM trial design and planned analysis adequately address objectives that, if met, will support the regulatory submission for approval of AXS-07 for the indication of acute treatment of migraine in adults with or without aura.

Based on FDA feedback, Axsome believes that MOMENTUM will be the only efficacy trial required to support an NDA filing for AXS-07 for the acute treatment of migraine.

Axsome plans to file the NDA in the second half of 2020. AXS-07 is a novel, oral, rapidly absorbed, multi-mechanistic investigational medicine for the acute treatment of migraine, consisting of MoSEIC meloxicam and rizatriptan.

AXS-07 is thought to act by inhibiting CGRP release, reversing CGRP-mediated vasodilation, and inhibiting neuro-inflammation, pain signal transmission, and central sensitization.

Axsome’s MoSEIC technology significantly increases the speed of absorption of the meloxicam component after oral administration while maintaining a long plasma half-life.

AXS-07 is covered by 21 issued U.S. and international patents providing protection out to 2036, and Axsome maintains worldwide rights.

Detailed study results, including additional secondary endpoints, will be submitted for presentation at upcoming medical meetings and for publication.

AXS-07 is also being evaluated in the INTERCEPT Phase 3 trial which is a randomized, double-blind, placebo-controlled study evaluating the early treatment of migraine with AXS-07.

In contrast to the ongoing MOMENTUM trial in which patients with a history of inadequate response treated migraine attacks once they have become of moderate or severe intensity, in the INTERCEPT trial, patients are to administer AXS-07 at the earliest sign of migraine pain.

AXSM closed at $101.98.

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BeiGene announces acceptance of supplemental NDA in China for REVLIMID

BeiGene announces acceptance of supplemental NDA in China for REVLIMID for the treatment of lymphoma

BeiGene (BGNE) announced that the China National Medical Products Administration has accepted a supplemental new drug application for #REVLIMID, in combination with rituximab, for the treatment of patients with relapsed or refractory indolent lymphoma.

BeiGene shares have been active lately, Stockwinners

REVLIMID was first approved in China in 2013 for the treatment of multiple myeloma in combination with dexamethasone, in adult patients who have received at least one prior therapy, and the label for the combination was expanded in 2018 to include adult patients with newly-diagnosed multiple myeloma who are not eligible for transplant.

REVLIMID used for the treatment of multiple myeloma, Stockwinners

It is currently marketed in China by BeiGene under an exclusive license from Celgene Logistics Sarl, a Bristol-Myers Squibb (BMY) company.

The sNDA is supported by a clinical, non-clinical, and chemistry, manufacturing and control data package, including the results from the pivotal Phase 3 AUGMENT study sponsored and conducted by Bristol-Myers Squibb.

Bristol-Myers treatment for colorectal cancer approved, Stockwinners
Bristol-Myers purchased Celgene and REVLIMID awhile back, Stockwinners

AUGMENT is a randomized, double-blind, multicenter trial in which a total of 358 patients with relapsed or refractory follicular or marginal zone lymphoma were randomized 1:1 to receive REVLIMID and rituximab or rituximab and placebo.

With a median follow-up of 28.3 months, R2 demonstrated clinically meaningful and statistically significant improvement in progression-free survival, evaluated by an independent review committee, relative to the control arm with a 54% reduction in the risk of progression or death.

The median PFS was 39.4 months for the R2 arm and 14.1 months for the control arm with an improvement by more than 2 years. Overall response rate, a secondary endpoint, was 78% in the R2 arm vs. 53% in the control arm, as assessed by the IRC.

Duration of response was significantly improved for R2 vs. control with median DoR of 37 vs. 22 months, respectively.

Bristol Meyers Comments on Celgene purchase, Stockwinners
Bristol Meyers Comments on Celgene purchase, Stockwinners

The most frequent adverse event in the R2 arm was neutropenia, vs. 22% in the control arm.

Additional commonly observed AEs in more than 20% of patients included diarrhea, constipation, cough, and fatigue. Adverse events that were reported at a higher rate in the R2 arm were neutropenia, constipation, leukopenia, anemia, thrombocytopenia and tumor flare.

BMY closed at $63.51. BGNE closed at $173.14.

See our other blogs about BeiGene.

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Axsome shares soar on its depression drug

Axsome Therapeutics: AXS-05 achieves primary endpoint in Phase 3 trial, Shares jump 77%

Axsome Therapeutics (AXSM) announced that AXS-05, a novel, oral, investigational NMDA receptor antagonist with multimodal activity, met the primary endpoint and rapidly and significantly improved symptoms of depression in the GEMINI Phase 3 trial in major depressive disorder.

Axsome Therapeutics shares soar on its Gemini depression drug study, Stockwinners

The GEMINI study was a randomized, double-blind, placebo-controlled, multi-center, U.S. trial, in which 327 adult patients with confirmed moderate to severe MDD were randomized to treatment with either AXS-05 or placebo once daily for the first 3 days and twice daily thereafter for a total of 6 weeks.

AXS-05 met the primary endpoint by demonstrating a highly statistically significant reduction in the Montgomery-Asberg Depression Rating Scale total score compared to placebo at Week 6, with mean reductions from baseline of 16.6 points for AXS-05 and 11.9 points for placebo.

AXS-05 rapidly and durably improved depressive symptoms as compared to placebo with statistical significance on the MADRS total score demonstrated at Week 1, the earliest time point assessed, and at all time points thereafter.

Rates of remission from depression were statistically significantly greater for AXS-05 compared to placebo at Week 2 and at every time point thereafter, being achieved by 39.5% of AXS-05 patients compared to 17.3% of placebo patients at Week 6.

AXS-05 demonstrated rapid onset of action with statistically significant improvement as compared to placebo on numerous endpoints at Week 1, or only 4 days after the start of twice daily dosing.

Statistically significant improvements at Week 1 were observed for MADRS total score; Patient Global Impression-Improvement; Clinical Global Impression-Severity; Clinical Global Impression-Improvement; Quick Inventory of Depressive Symptomatology-Self-Rated; Quality of Life Enjoyment and Satisfaction Questionnaire-Short Form; and other endpoints.

On all secondary endpoints including the following, AXS-05 demonstrated statistically significant improvement at Week 6 compared to placebo, reflecting increasing treatment effects over time: clinical response on the MADRS total score; PGI-I; CGI-S; CGI-I; QIDS-SR-16; Sheehan Disability Scale; and Q-LES-Q-SF.

AXSM is up 77% to $82.66.

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Felix Energy sold for $2.5 billion

WPX Energy acquires Felix Energy for $2.5B

WPX Energy (WPX) “is taking another significant step in its commitment to delivering shareholder value” with the $2.5B purchase of Felix Energy, “one of the highest quality Delaware Basin operators.”

Felix has approximately 1,500 gross undeveloped locations in the eastern portion of the basin, with expected production of approximately 60 MBoe/d (70% oil) at the time of anticipated closing. WPX plans to implement a dividend post-closing, targeting approximately $0.10 per share on an annualized basis at initiation.

WPX buys Felix Energy for $2.5B, Stockwinners

WPX Energy, Inc., an independent oil and natural gas exploration and production company, engages in the exploitation and development of unconventional properties in the United States. The company operates 657 wells and owns interests in 808 wells covering an area of approximately 130,000 net acres located in Delaware Basin, Texas and New Mexico; and operates 323 wells and owns interests in 87 wells that covers an area of approximately 85,087 net acres situated in the Williston Basin, North Dakota. 

Felix Energy sold for $2.5B, Stockwinners

The acquisition and dividend program follow other steps WPX took in 2019 to enhance its value proposition, including reducing net debt, executing attractive midstream monetizations, launching a share buyback program and generating free cash flow.

The purchase price consists of $900M cash, subject to closing adjustments, and $1.6B in WPX stock issued to the seller.

WPX plans to fund the cash portion through issuance of $900M of senior notes on an opportunistic basis.

WPX also has obtained committed financing from Barclays in connection with the transaction and has full access to a $1.5B revolving credit facility.

The stock consideration comprises approximately 153M WPX shares, which is based on the 10-day volume-weighted average price as of Dec. 13.

The transaction is subject to customary closing conditions and approval by WPX shareholders. The parties anticipate closing the transaction early in the second quarter of 2020.

WPX’s board unanimously approved the transaction.

The acquisition is consistent with all of the tenets in WPX’s five-year vision for shareholders that the company introduced in November during its third-quarter report.

On a pro forma basis, WPX expects to generate significant free cash flow in 2020 at $50 oil.

Following the acquisition, cash flow per share, EPS, free cash flow per share, return on capital employed, and cash margins are all expected to increase.

WPX also expects to continue its opportunistic share buybacks, to implement the previously mentioned dividend program, and to reduce its leverage to 1.0x by year-end 2021.

WPX based all of its transaction economics on $50 oil, with no assumptions for improvements in development costs or operating efficiencies. However, WPX believes significant upside exists by capturing synergies associated with scale.

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Synthorx sold for $2.5 billion

Sanofi to acquire Synthorx for $68 per share in cash

Sanofi (SNY) and Synthorx (THOR) entered into a definitive agreement under which Sanofi will acquire all of the outstanding shares of Synthorx for $68 per share in cash, which represents an aggregate equity value of approximately $2.5B, on a fully diluted basis.

Synthorx sold for $2.5 billion, Stockwinners

The transaction was unanimously approved by both the Sanofi and Synthorx boards.

Under the terms of the merger agreement, Sanofi will commence a cash tender offer to acquire all of the outstanding shares of Synthorx common stock for $68 per share in cash.

The $68 per share acquisition price represents a 172% premium to Synthorx’s closing price on December 6.

Following the successful completion of the tender offer, a wholly owned subsidiary of Sanofi will merge with Synthorx and the outstanding Synthorx shares not tendered in the tender offer will be converted into the right to receive the same $68 per share in cash paid in the tender offer.

The tender offer is expected to commence in December.

Sanofi plans to finance the transaction with cash on hand. Subject to the satisfaction or waiver of customary closing conditions, Sanofi expects to complete the acquisition in the first quarter of 2020.

“Synthorx’s Expanded Genetic Alphabet platform is expected to be a source for developing a differentiated therapeutic pipeline. Alone and in combination with other existing Sanofi platforms, including the Nanobody technology, it will enable the company to develop a wide range of novel biologics, including drug conjugates, protein fusions, and multi-specific biologics, with applications beyond oncology and extending to other therapeutic areas… The addition of THOR-707 and Synthorx’s other earlier-stage cytokine programs to Sanofi’s pipeline will enhance Sanofi’s position in oncology, and in immuno-oncology. We expect IL-2 to become a foundation of future IO-IO combinations as well as offering multiple combination opportunities with Sanofi’s clinical and pre-clinical oncology assets, including with PD-1, CD-38, and molecules that modulate effector T-cells and natural killer cells.”

THOR closed at $25.04, it last traded at $67.43. SNY closed at $46.03.

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Truck sales decline in November

Classes 5-8 truck orders soften in November amid trade and tariff worries

Truck sales downturn could be canary in the coal mine

There are eight classes of commercial motor vehicles in the United States, and they’re divided into three, more general categories: light-duty, medium-duty, and heavy-duty. Commercial motor vehicles or trucks that operate on U.S. highways can be classified based on their gross vehicle weight rating (GVWR).

ACT Research said in an earlier report:

“Preliminary November data show that Classes 5-8 net order volumes were uniformly soft. Combined NA Classes 5-8 intake fell 15% m/m and 38% y/y in November on a nominal basis. Preliminary North America Class 8 net order data show the industry booked 17,500 units in November, down 20% from October, while Classes 5-7 orders fell 8% m/m, to 15,300 units.

Complete industry data for November, including final order numbers, will be published by ACT Research in mid-December.

Various Classes of Vehicles, Stockwinners

ACT’s State of the Industry:

Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales.

Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs.

This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package.

A first-look at preliminary net orders is also published in conjunction with this report.

“Preliminary November data show that Class 8 net orders failed to sustain October’s encouraging start to the order season,” said Tim Denoyer, ACT’s Vice President and Senior Analyst.

He continued, “The freight market downturn worsened in the past month and uncertainty surrounding trade and tariffs continue to weigh on truck buyers’ psyches. With rising pressure on carrier profits from the combined impact of lower rates and the recent, rather sudden jump in insurance premia, recent events have not developed in the industry’s favor.” Denoyer concluded,

“While private fleets continue to add capacity on the retail end, the market is increasingly heeding for-hire price signals and the stage is being set to right-size the fleet, bringing it closer to equilibrium with the work to be done.”

Historically, Dow Jones Transports have sold off prior to the rest of the market. The .djt has turned bearish as is shown above.

Publicly traded companies in the space include ArcBest (ARCB), J.B. Hunt (JBHT), Knight-Swift (KNX), Old Dominion (ODFL), Swift Transportation (SWFT), Werner (WERN), Paccar (PCAR), Navistar (NAV)and Cummins (CMI).

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Audentes Therapeutics sold for $3 billion

Astellas to acquire Audentes for $60 per share in cash

Astellas Pharma (ALPMY) and Audentes Therapeutics (BOLD) announced that they have entered into a definitive agreement for Astellas to acquire Audentes at a price of $60.00 per share in cash, representing a total equity value of approximately $3B.

Under the agreement, which has been unanimously approved by the boards of directors of both Astellas and Audentes, Astellas will acquire Audentes through Asilomar Acquisition Corp., a wholly-owned subsidiary of Astellas US Holding, Inc.

Gene Therapy pays off nicely for Audentes Therapeutics, Stockwinners

Asilomar will commence a tender offer for all outstanding shares of common stock of Audentes, for a price of $60.00 per share in cash.

Promptly upon successful completion of the Tender Offer, Asilomar will be merged into Audentes, and any remaining shares of common stock of Audentes will be canceled and converted into the right to receive the same $60.00 per share price.

Astellas pays $3 billion for Audentes Therapeutics, Stockwinners

The board of directors of Audentes has resolved to recommend that Audentes stockholders tender their shares to Astellas. Consummation of the transaction is subject to customary closing conditions, including US antitrust clearance and the tender of a majority of Audentes’ outstanding shares of common stock.

The offer price represents a premium of 110% to Audentes’ closing share price of $28.61 on December 2, 2019.

The all-cash transaction is valued at approximately $3B including the purchase of all common shares, options, restricted stock units and other securities.

The Tender Offer period is expected to commence in the next few weeks and to expire 20 business days after its commencement, unless otherwise extended.

If the Tender Offer conditions are not satisfied, Astellas may be required to extend the Tender Offer under certain circumstances. Astellas is still reviewing the impact of a consummation of the transaction on its financial results for the fiscal year ending March 31, 2020.

Audentes Therapeutics, Inc. focuses on developing and commercializing gene therapy products for patients living with serious, life-threatening rare diseases caused by single gene defects.

The company is developing AT132, which is in Phase I/II clinical studies for the treatment of X-linked myotubular myopathy (XLMTM); AT342 that is in Phase I/II clinical studies to treat crigler-najjar syndrome; AT845, which is in preclinical studies for the treatment of pompe disease; and AT307 to treat CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia. 

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The Medicines Co. sold for $9.7B

Novartis to pay $85 per share in cash for each MDCO share

The Medicines Company (MDCO) announced that it has entered into definitive agreement in which Novartis (NVS) will acquire the company for $85 per share in an all-cash transaction, implying a fully diluted equity value of $9.7B.

Novartis to pay $85 per share in cash for each MDCO share, Stockwinners

The stock closed Friday down $1.21 to $68.55. See our previous blog post.

The purchase price represents a premium of approximately 45% to The Medicines Company’s closing share price of $58.65 on November 18, the last trading day prior to news reports of a potential transaction between The Medicines Company and Novartis.

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis to pay $85 per share in cash for each MDCO share, Stockwinners , Stockwinners

The transaction was unanimously approved by the boards of both companies. Under the terms of the merger agreement, Novartis will commence a tender offer to purchase all outstanding shares of The Medicines Company for $85 per share in cash.

Following the completion of the tender offer, a wholly owned subsidiary of Novartis will merge with The Medicines Company and shares of The Medicines Company that have not been tendered and purchased in the tender offer will be converted into the right to receive the same price per share.

Completion of the transaction is expected in Q1 of 2020, pending the successful completion of the tender offer and other customary closing conditions.

Until that time, The Medicines Company will continue to operate as a separate and independent company. The company expects to file regulatory submissions for inclisiran in the U.S. in Q4 of 2019 and in Europe in the first quarter of 2020.

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CRISPR Therapeutics sharply higher on gene editing data

Crispr, Vertex announce interim data from first two patients treated with CTX001

CRISPR Therapeutics (CRSP) and Vertex Pharmaceuticals Incorporated (VRTX) announced positive, interim data from the first two patients with severe hemoglobinopathies treated with the investigational CRISPR/Cas9 gene-editing therapy CTX001 in ongoing Phase 1/2 clinical trials.

Gene Editing shows promises in treating patients, Stockwinners

One patient with transfusion-dependent beta thalassemia received CTX001 in the first quarter of 2019 and data for this patient reflect nine months of safety and efficacy follow-up.

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Vertex and CRISPR report positive data, Stockwinners

One patient with severe sickle cell disease received CTX001 in mid-2019 and data for this patient reflect four months of safety and efficacy follow-up.

These studies are ongoing and patients will be followed for approximately two years following infusion.

Several additional patients have been enrolled and have had drug product manufactured across the two studies.

The patient with TDT has the beta0/IVS-I-110 genotype and required 16.5 transfusions per year before enrolling in the clinical study. The patient achieved neutrophil engraftment 33 days after CTX001 infusion and platelet engraftment 37 days after infusion.

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Two serious adverse events occurred, neither of which the principal investigator considered related to CTX001: pneumonia in the presence of neutropenia and veno-occlusive liver disease attributed to busulfan conditioning; both subsequently resolved.

At nine months after CTX001 infusion, the patient was transfusion independent and had total hemoglobin levels of 11.9 g/dL, 10.1 g/dL fetal hemoglobin, and 99.8% F-cells.

The patient with SCD experienced seven vaso-occlusive crises per year before enrolling in the clinical study. The patient achieved neutrophil and platelet engraftment 30 days after CTX001 infusion.

Three SAEs occurred, none of which the PI considered related to CTX001: sepsis in the presence of neutropenia, cholelithiasis, and abdominal pain, all of which resolved.

At four months after CTX001 infusion, the patient was free of VOCs and had total hemoglobin levels of 11.3 g/dL, 46.6% fetal hemoglobin, and 94.7% F-cells.

William Blair

The firm upgrades Crispr Therapeutics to Outperform after ‘impressive’ data .

William Blair analyst Raju Prasad upgraded Crispr Therapeutics to Outperform from Market Perform after the company presented initial results from the ongoing Phase I/II trials of CTX001 for the treatment of beta thalassemia and sickle cell disease.

The analyst says today’s data cut was “impressive” as it exceeds the 30% fetal hemoglobin threshold that he viewed as critical.

To date, Crispr has shown initial proof-of-concept in beta thalassemia and sickle cell that exceeded expectations and de-risks its wholly owned immuno-oncology platform, Prasad tells investors in a research note. Further, given the “optionality” of the CRISPR-Cas9 platform and potential cost-effectiveness when compared with lentiviral-based therapies, Crispr could be a potential takeout candidate, adds the analyst.

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Goldman Sachs

Goldman Sachs analyst Salveen Richter raised his 12-month price target for Crispr Therapeutics (CRSP) to $75 from $52 while keeping a Neutral rating on the shares.

The first clinical results from the ongoing CTX001 trial impress, Richter tells investors in a research note. The analyst, who cautions the data represents small patient numbers, is “highly encouraged” with the profile of CTX001 and sees today’s positive data as initial validation of Crispr’s ex-vivo gene editing platform.

Roth Capital

Roth Capital analyst Tony Butler raised his price target for Crispr Therapeutics to $100 from $65 and maintained a Buy rating after the company and partner Vertex Pharmaceuticals (VRTX) announced the first CTX001 early clinical data in two patients.

In a research note to investors, Butler says that though only two patients have been treated with CTX001, these data provide a hint that CRISPR-Cas9 could be curative for hemoglobinopathies, adding that gene-editing is “clearly not a fiction.”

The results utilizing gene-editing with CRISPR-Cas9 to create allogenic CAR-T cells against various cancers may also increase its probability of success based on successful editing in the CLIMB trials, he said.

Cantor Fitzgerald

Cantor Fitzgerald analyst Alethia Young raised her price target for Vertex Pharmaceuticals (VRTX) to $229 from $217 after the company and partner Crispr Therapeutics (CRSP) announced the first CTX001 early clinical data in two patients.

The analyst finds the data “highly encouraging” and thinks this could be an “exciting pipeline program of focus for Vertex by this time next year.” She increased her probability of success for CTX001 to 20% from 10% and reiterates an Overweight rating on shares of Vertex.

Piper Jaffray

Piper Jaffray analyst Edward Tenthoff raised his price target for Crispr Therapeutics (CRSP) to $107 from $100 after the company and partner Vertex Pharmaceuticals (VRTX) reported first-ever CTX001 data on one beta thalassemia and one sickle cell disease patient. Tenthoff is “impressed by these early results showing potential curative effect and look for more patients and longer follow-up next year.” He reiterates an Overweight rating on Crispr Therapeutics.

CRSP is up $10 to $68.55. VRTX is up $5.07 to $215.07

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Medicines Co. is in play

Novartis holds talks about potential acquisition of Medicines Co

Medicines Co. (MDCO) has attracted takeover interest from companies including Novartis (NVS), which has been holding talks about a potential acquisition of the New Jersey-based company, Bloomberg’s Ed Hammond, Nabila Ahmed and Dinesh Nair report, citing people familiar with the matter.

Novartis is eyeing Medicines Co., Stockwinners

According to the people, Novartis is conducting due diligence on Medicines Co. Other potential acquirers have also expressed interest in buying Medicines Co., they add.

Novartis is looking for products to replace its out of patent products, Stockwinners

The Medicines Company focuses on developing therapeutics for the treatment of therosclerotic cardiovascular disease. The company is developing Inclisiran, an investigational RNA interference therapeutic that inhibits production of proprotein convertase subtilisin/kexin type 9, which controls LDL-cholesterol levels.

Novartis has historically had a strong cardiovascular drug franchise, but lost ground when Diovan, once a $6 billion-per-year seller, lost patent protection in 2012 and left the company without an immediate, innovative follow-up product.

Novartis Chief Executive Officer Vas Narasimhan has relied on deals to sharpen the company’s focus on innovative drugs for cancer and rare diseases. The Basel, Switzerland-based company has announced close to $16 billion of acquisitions since he took over as CEO in February 2018, according to data compiled by Bloomberg. He has also spun off the Alcon Inc. eye-care division and ditched a stake in a consumer-health venture.

Baird’s Comments

Baird analyst Madhu Kumar said he has utter conviction that The Medicine’s Co. inclisiran can disrupt cholesterol therapy. The analyst cited its results from the ORION-9/10/11 trial which was released and supported his thesis. He said the remaining question is whether the company can find an acquirer or partner to help launch inclisiran.

Kumar reiterated his Outperform rating and $100 price target on The Medicine’s Co. shares.

JPMorgan’s Take

JPMorgan analyst Jessica Fye noted that Bloomberg is reporting that Novartis (NVS) and other potential acquirers have expressed interest in buying The Medicines Company (MDCO), adding that her talks with investors indicate that Novartis is viewed as the most likely buyer.

She further notes that Medicines Co. shares were trading above her standalone valuation at yesterday’s close, which she attributes to some anticipation of a deal, and that today’s move puts the stock in a price range greater than 40% above her standalone target.

Outside of Novartis, Fye also believes an acquirer could be a less expected company, but if only one company is interested they could try to “wait it out” to the point where investors might begin to worry that Medicines could have to take on the substantial inclisiran launch investment independently. However, if multiple players are interested, as Bloomberg suggests, she thinks “competitive tension” could lead to a near-term acquisition.

MDCO is up $12.35 to $71.00.

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